SGR Repeal Bill: 10-Year Pay Freeze, but P4P Incentives

by David Pittman David Pittman,Washington Correspondent, MedPage Today
October 30, 2013

WASHINGTON -- The latest version of a bill to repeal Medicare's sustainable growth rate formula freezes payment levels through 2023 but creates a performance-based incentive program in 2017, according to a discussion draft obtained by MedPage Today.

That program -- dubbed the "value-based performance (VBP) payment program" -- would replace the myriad of current incentive programs for physicians and create a "single budget-neutral incentive payment program," according to the draft from the Senate Finance and House Ways and Means Committees.

"By combining the current quality incentive programs into one comprehensive program, this proposal would further value-based purchasing within the overall Medicare program while maintaining and improving the efficiency of the underlying structure with which professionals are already familiar," the draft states.

Most importantly to doctors, the bill would permanently repeal the SGR.

The draft is expected to be publicly released later Thursday and is Congress' latest step toward doing away with the much-derided SGR. Physician payments will be cut by roughly 24.4% in 2014 unless Congress acts to forestall those cuts -- an annual step it has taken for more than a decade.

"This discussion draft is an important step in a long-term solution to this failed policy,” Rep. Dave Camp (R-Mich.), chairman of the House Ways & Means Committee, said in a statement. “Creating a policy that rewards providers for delivering high quality, efficient healthcare is the ultimate goal, and this draft brings us one step closer to that reality"

The Senate Finance and House Ways and Means Committees have each been working on their own proposal and released their draft this week, hoping to find a way to move Medicare away from a fee-for-service-based model.

Comments on the draft are due to the committees by Nov. 12. After that, they hope to release more formal language.

The American Medical Association (AMA) applauded the draft's release. "Congress is demonstrating that they understand that ending the failed SGR this year is fiscally responsible, and that the current Medicare payment system is a barrier to adoption of healthcare delivery and payment reforms that will improve healthcare for America’s seniors and rein in overall costs,"; AMA President Ardis Dee Hoven, MD, said in a statement.

The AMA is still analyzing the summary, she said.

The VBP program proposed in the Senate Finance and House Ways and Means draft would assess eligible professionals' performance in quality, resource use, clinical practice improvement activities, and EHR meaningful use. The program would take effect for physicians in 2017, and hit physician assistants, nurse practitioners, and clinical nurse specialists in 2018.

Doctors who receive a "significant portion" of their revenue from some alternative payment model would be exempt from the performance-based incentive program and instead receive a bonus payment starting in 2016. That revenue threshold would be 25% for 2016 and 2017 and increase to 75% in 2020 and 2021.

Lawmakers called for $10 million each year between 2014 and 2018 to provide technical assistance to small practices -- those with 10 or fewer eligible professionals or those in rural areas -- to help facilitate participation.

After 2023, clinicians participating in an "advanced alternative payment model" would receive annual updates of 2%, while all others would receive 1% updates.

It would also require providers to consult appropriate use criteria for advanced imaging and electrocardiogram services. Payment wouldn't occur if appropriate consultation did not occur.

The Medical Imaging & Technology Alliance (MITA), a trade group for imaging companies, praised the inclusion of the appropriate use provision.

"It is critical that policymakers establish physician-developed appropriateness criteria as the benchmark to guide the use of advanced medical imaging services," MITA executive director Gail Rodriguez said in a statement. "Appropriateness criteria, rather than the blunt instrument of across-the-board imaging cuts, is how to root out inappropriate use of imaging."

The draft also sets a method to determine misvalued codes and address them in 2016, 2017, and 2018. If expenditures for particular codes are 1% off their estimated amount, then those codes are deemed misvalued.